Singapore state investor Temasek Holdings and US-based investment firm March Capital joined existing investor Warburg Pincus in the transaction, which also illustrates the growing attractiveness of the used-car listings business.

The valuation of CarTrade in the new round could not be determined. The company had announced its previous round of $30 million in October 2014, which valued it at $100 million.

Only Quikr has raised a bigger round - $150 million last year - and this fund-raising by CarTrade is the largest for online portals focussed on specific verticals like automobiles and real estate.

"The funds will used to further expand our services organically and we are also looking at a few acquisitions in the new and used car spaces," said Vinay Sanghi, founder & CEO of CarTrade. ​Avendus Capital was the financial advisor to CarTrade on the transaction.

Temasek, which has over $166 billion under management, has emerged one of the most aggressive investors in late-stage Internet companies by picking up stakes in restaurant listings provider Zomato, insurance marketplace PolicyBazaar, online retailer Snapdeal and data analytics company Manthan.

Unlike most large acquisitions in Indian Internet, like Snapdeal’s acquisition of Freecharge, Ola’s purchase of Taxiforsure and Flipkart’s Myntra buy, the acquisition of CarWale was mostly a cash transaction. While a part of it was driven by Axel Springer asking for cash, experts said that other factors could also have driven it.

"CarTrade is really smart as they think their equity is worth a lot more than what they want to dilute, and cash is available," said Siddharth Talwar, partner at venture capital firm Lightbox.

After the acquisition, CarWale is focusing on the new car market and CarTrade on used cars. CarTrade also got the two-wheeler business Bikewale as a part of the deal.

Combined CarTrade and CarWale get 32 million visits per month. They have some 10,000 new and used car dealers in their network with more than 2.25 lakh used cars listed. CarTrade also has an auctions business, where over 2.5 lakh vehicles are sold to the wholesale market every year. Sanghi earlier told ET that combined entity will target $300-400 million in revenue in the next four years.

According to industry executives, the size of used car market in India is $125 billion, of which 1% is marketing by dealers. Additionally, car manufacturers spend almost Rs 4,500 crore on advertising every year. But used cars is where the action has shifted to.

"New cars is done and dusted, but used cars is where a battle royale will take place with multiple large business opportunities in classifieds, dealer services, auctions and peer-to-peer services," said Umang Kumar, President of CarDekho & CEO of Gaadi.com, in a November interview with ET.

Last year CarDekho, CarTrade's main rival, acquired ZigWheels from Times Internet which is a part of the group which publishes this paper. Horizontal classifieds player Quikr has also been pushing into the market by heavily advertising its vertical platform QuikrCars.

Cox Automotive, the owner of the largest digital automotive marketplace in the US called Autotrader, also picked up a strategic stake in Mahindra First Choice Wheels in November 2015.

Among the new startups in the space are Zoomo, Droom and Credr. Zoomo is a peer-to-peer car sales platform which is backed by Russian billionaire Yuri Milner and SAIF Partners; Droom raised Rs 100 crore from Lightbox Ventures and Japanese internet firm Beenos Asia; and CredR raised Rs 96 crore from Fidelity Growth Partners India and other investors.